SME Support Initiatives to Get Business Up to Speed
Budget 2017 offered some relief for SMEs trying to cope with a challenging environment.
Local enterprise was a key focus of both this year's Budget and the report by the Committee on the Future Economy - a broad plan that charts Singapore's future direction. As SMEs will play a key role in the economy's long-term growth, various measures were announced in the Budget to help support their development.
These included the extension of schemes to help ease their financial burden as firms reposition for the future economy. There were also initiatives to help SMEs adopt digital technologies that will be critical for success in today's world.
Here was some of the help on offer in Budget 2017:
A) Continuation of Measures to Support Businesses
The Wage Credit Scheme that helps firms cope with rising wages is estimated to pay over $600 million to businesses this March. Around 70 per cent of this amount will be given to SMEs.
The Special Employment Credit will continue to provide employers with support for the wages of older workers till 2019. Over $300 million will be paid out in FY2017 and is expected to benefit 370,000 workers.
The SME Working Capital Loan - where the Government co-shares 50 per cent of the default risk for loans of up to $300,000 per SME - will continue to be available for the next two years. Since its launch in June 2016, the scheme has catalysed more than $700 million of loans. On its part, DBS has granted over $300 million worth of loans to more than 2,000 SMEs under this initiative.
Enhancement of Corporate Income Tax Rebate
The cap for the Corporate Income Tax (CIT) Rebate will be raised from $20,000 to $25,000 for YA2017. The rebate will remain at 50% of tax payable. The rebate will also be extended for another year to YA2018, at a reduced rate of 20% of tax payable, capped at $10,000.
B) SMEs Go Digital Programme
This programme will help SMEs build digital capabilities and features three components.
1. SMEs will receive step-by-step advice on the technologies to use at each stage of their growth through a series of sectoral Industry Digital Plans. These plans will initially cover the Retail, Food Services, Wholesale Trade, Logistics, Cleaning and Security sectors.
Helping SMEs adopt digital technologies has been a focus at DBS. The bank organises a series of sector-focused events to showcase the latest technology solutions within a business resource package that are relevant to industry players. DBS has held such events for the F&B, retail and automotive sectors.
2. SMEs will also get help at SME Centres and a new SME Technology Hub to be set up by IMDA. Companies can approach business advisors at SME Centres for advice on off-the-shelf technology solutions that are pre-approved for funding support, or connect to Info-communications and Technology (ICT) vendors and consultants. The more digitally advanced firms can get specialist advice from the SME Technology Hub.
In this regard, the DBS Techmatch programme also helps connect local SMEs with ICT firms globally that are able to develop digital solutions to help then overcome problems in areas such as inventory management or talent management. Participating SMEs have been able to implement solutions in just months, and at a fraction of the cost of developing their own from scratch.
3. SMEs that are ready to pilot emerging ICT solutions can receive advice and funding support.
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